HUNDREDS of customers who were injured after buying "toxic" sofas look set to receive a total payout of up to £20 million, the High Court heard today.

An agreement has been thrashed out by lawyers which paves the way for "swift" payouts for many victims, a judge in London heard.

Mr Justice MacDuff was told that a "claims handling agreement" had been reached which could "potentially benefit" between 1,500 and 2,000 claimants.

He heard that the agreement did not resolve the whole of the litigation surrounding the purchase of the sofas, but that it would "open the way to swift compensation for many hundreds" of people.

A statement issued by lawyers after the hearing announced that around 1,650 victims of "toxic sofas" manufactured in China, which caused "serious burns", would receive "combined payouts totalling up to £20 million".

They are expected to receive between £1,175 and £9,000, depending on the severity of their symptoms.

Legal action is still ongoing in 3,000 cases where liability remains in dispute.

Lawyers for claimants in what is believed to be the largest consumer group litigation in UK legal history say they suffered painful medical complaints due to the presence of the ``highly sensitising'' chemical DMF - dimethyl fumarate - in leather sofas manufactured by Chinese companies Linkwise and Eurosofa.

They were said to have suffered severe skin or eye complaints, breathing difficulties or other medical complications after exposure to the chemical.

The group action was launched against the three retailers of the affected sofas - Argos, Land of Leather and Walmsleys - all of whom admitted liability.

The EU has now banned the use of DMF after consumers in at least five European countries suffered skin burns and breathing problems due to the chemical used in numerous imported leather products, say solicitors.

Richard Langton, senior litigation partner at law firm Russell Jones & Walker, who led the group litigation against the retailers, said after the hearing: "Many suffered serious health problems, simply because of the new sofa they chose.

"At the start there was a real fear factor as nobody knew the cause.

"The doctors took nine months to identify the chemical. Some people thought they had skin cancer or were dying.

"We believe many sofas are still in use with DMF in them. Anyone who develops symptoms should seek urgent medical advice. Anyone who has not registered a claim yet should seek help as time is running out to bring a claim."

During the hearing Ralph Lewis QC said the claims handling agreement related only to "non-severe" cases.

Around 350 customers of Land of Leather, now in administration, will miss out as another High Court judge previously ruled that they were not entitled to compensation from Zurich Insurance, Land of Leather’s insurers.